Cost per building square

Hi Johnno11
As builders in regional Victoria our prices may differ slightly to yours in materials/transport costs but maybe we don’t quite have the union headaches that metropolitan builders do, which can add significant costs.
Square meterage prices are very deceptive and a bit dangerous to quote as every home is unique. For example a house under a rectangular iron roof with a gable each end or 4 hips will be much cheaper to build than one with bay windows and twists and turns. Every hip, gable and valley has a plumber working at about $60 plus per hour here and that is just labour. That same example is then reflected in the brickwork underneath; a rectangular house with 4 corners will result in less offcuts and less bricklayer labour for set out than one with bay windows, and 15 corners for him to negotiate. Our bricklayer charges us an additional $500 on top of his price-per-thousand for a bay window shaped wall. So you can see that the intricacy of the home can impact the price. Also the same for the fittings; you can spend 5000 on a flat pack kitchen or get a custom job for 20k. You can buy tiles for 20 dollars per sq and tiles for 200 per sq. What is your soil type and site elevation. Clay soils need deeper footings than loam type soils, everything can impact. No’one would be able to guess at the value for money you were getting unless the specifications and plan were available (and then not everyone has the experience in new homes to assess either).
As a general rule of thumb with standard fittings and fixtures we usually end up around $11k per square (of living area) including gst and that includes the garage area (we can usually fit that in without using its area in the cost unless it is really large). That doesn’t include landscaping or fencing or large amounts of concrete for driveways etc. You have got to remember too that little Johnny Howard is taking 1/11th of that price to pay for his superannuation fund so maybe your builders prices are not too bad. This is a personal opinion and as our business is 6 hours away there may also be others costs associated with your builders that we don’t have to have. Just make sure they are all licenced with the Building Commision and that they take out the building permit on your behalf (you will have to provide them with a letter to this effect). You may not get warranty insurance if they list you as an owner/builder.

Regards
Julie Fisher
Daryl Fisher Homes

Hi Johnno11
While you are considering the owner/builder option you could approach one of the big building companies like JGKing etc. If this is purely a rental then this level of quality may suffice and will certainly be cheaper than a custom builder. Ring a couple and see if they will quote your plan or they may have something you can use on your land.

1. Before you get too excited about the owner/builder option I would talk to your lender.Many lenders ask for a bigger deposit of equity or cash from owner/builders. Your lender may also ask you to submit a breakdown of the construction costs to ensure that you have not left anything out. At the end of the day the house is more valuable to them as equity if it is finished. They do not want you to lend to your full capacity and then run out of money half way through and be knocking on their door for a top up.
2. You will not need to be licenced but you will need to employ suitably qualified contractors for the major structural works. Each structural trade supplying materials/labour for more than 12k should supply you with warranty insurance (a cost they will forward to you). Trades that you would expect to supply warranty would be concreters (many are still unlicenced although they should be), carpenter and bricklayer. Plumbers and electricians have their own industry body that inspects their work. A copy of the plumbers compliance certificate may need to be handed to your building inspector prior to occupancy to ensure work was done by a suitably qualified person. Warranty insurance among 3 structural trades could add up to 3-5k depending on the history and financial stability of the contractors. If you choose to employ contractors (structural) and not get warranty insurance for their work you will then have no recourse to the Building Comission, or them, to rectify any faulty workmanship or materials. As an owner builder you will not need to take out warranty insurance for yourself at the start of the job (a builder would) but if you sell the home within a 6.5 year time frame you will have to take out a pro-rata warranty insurance policy to insure the new owners for any faulty or defective work/trades on your behalf.
‘Sometimes’ there are financial benefits. This will depend on you to a large part.
1. Are you organized – can you keep the job moving along to minimize the construction time and therefore get a tenant in quicker. Remember as soon as the loan starts being drawn you start paying interest.
2. Owner/builders pay higher building permit fees than qualified builders.
3. Owner/builders pay higher warranty insurance when they sell than a builder would pay.
4. Get a couple of prices from tradies (that don’t know each other preferrably) for each of the major expenses so you can ensure that the prices are competitive. Inexperienced owner/builders often get caught out with greedy contractors and I would hope that there are not too many around. Often a referral from your building inspector will point you in the right direction towards some honest quality tradesmen.
5. All trades will look after their ‘bread & butter’ employers before rushing to ‘one-off’ jobs. To minimize delays develop a good relationship with your tradies and try to make sure your job is ready for them when you ask them to come. A busy contractor may not come back if you aren’t organized.
6. Get quotes – if you are on a strict budget this is a no-brainer.
Quotes for – drafting, permits, site insurance, tiler/tiles, carpet, cabinetry, kitchen appliances, frame, slab, engineers, plasterer, painter, fixtures, glaziers, pavers etc. You will then appreciate how quickly these costs add up and how hard we poor builders work to earn our small margins.

Let me know if you need more info. Be prepared for the organizing stage to take longer than the construction of the house!!

Julie

Thanks Amanda! [blush2]Just ‘paying forward’ the help and advice others (such as yourself) have given to me. It’s a great forum.